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Tax rebates & offsets

Low Income Tax Offset | Senior Australians' and Pensioner Tax Offset | Medical Expenses Offset Dependant (Invalid and Carer) Tax Offset

Various rebates and tax offsets apply to reduce an individual's income tax. These tables summarise the tax offsets for senior Australians, pensioners, mature age workers, medical expenses and tax offsets for low income earners.

Low income tax offset

Low income tax offset 2013-14

Taxable income

Offset amount

$0 - $37,000


$37,001 - $66,666

$445 less (1.5% of excess over $37,000)

$66,667 and above


The Tax Office has a LITO calculator (click here to access).

Note that as well as the LITO reduction rate changing from July 1, 2015, to 1 cent for each dollar over $37,000, the maximum offset available will also reduce to $300. The cut-out threshold will increase slightly to $67,000. However, in measures associated with the repeal of the carbon tax and consequent removal of 2015-16 tax cuts, the government’s intention is to restore LITO to $445 with a 1.5 cent withdrawal rate from the 2015-16 year.

The tax scale for 2015-16 currently provides a tax cut by the lift in tax free threshold from $18,200 to $19,400, which is partly offset by an increase in the 32.5 cent marginal rate to 33 cents, and the reduction in LITO from $445 to $300. The effect of the repeal of the carbon tax is to revert the 2015-16 tax scale and the LITO to the same rates which have been in place since the 2012-13 year.

Senior Australians and Pensioners Tax Offset

The figures listed below are for 2013-14.

Family status (pensioner) Maximum tax offset per person Shade-out rebate income threshold Cut-out rebate income threshold
Single $2,230 $32,279 $50,119
Married or defacto $1,602 $57,948* $83,580*
Couple seperated due to illness $2,040 $62,558* $95,198*

* Combined

The ‘Maximum Offset’ reduces by 12.5 cents for every dollar of taxable income over the ‘Lower Threshold’ and reduces to nil for taxable income levels at or above the ‘Upper Threshold’.

Net Medical Expenses Offset

The offset rate is based on adjusted taxable income.
The thresholds are $88,000 for singles or $176,000 for a couple or family.
The family threshold will increase by $1,500 for each dependent child after the first. In order to claim tnis offset in the 2013-14 year, a taxpayer must have claimed the offset in the 2012-13 year. This additional requireemnt however does not apply to disability aids, attendant care or aged care expenses.
NOTE: The offset is to be phased out entirely by July 1, 2019, subject to the passage of legislation.
Claim limits are best explained with the table below:

Family status ATI threshold What can I claim?


(single at June 30, 2014 and no dependent children)

$88,000 or less

20% of net medical expenses over $2,162

above $88,000

10% of net medical expenses over $5,100


(with a spouse at June 30, 2014, or dependent children at any time during the year, or both)

$176,000* or less

20% of net medical expenses over $2,162

above $176,000*

10% of net medical expenses over $5,100

* plus $1,500 for each dependent child after the first.

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Dependant (Invalid and Carer) Tax Offset

The Dependant (Invalid and Carer) Tax Offset replaces several other offsets, including the invalid spouse, carer spouse, housekeeper, housekeeper (with child), child‑housekeeper, child‑housekeeper (with child), invalid relative and parent/parent‑in‑law tax offsets. See details here.

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